Exchanges, integration technology to drive b-to-b

Under the pall cast by Ariba Inc.’s aborted takeover of Agile Technologies LLC and a sinking stock market, representatives from the industry’s top e-commerce technology suppliers this month argued that vendors need to shift strategies to address evolving business-to-business trading models during a panel session at the Internet and E-business Expo in New York.

Officials from two vendors closely associated with public trading exchanges, Commerce One Inc. and Ariba, agreed with SAP America Inc. CEO Wolfgang Kemna and i2 Technologies Inc. Chief Technology Officer Jim Mackay that the greatest demand is in private exchanges right now. Private exchanges are b-to-b networks that include an enterprise’s supply chain and other partners.

“We don’t see private exchanges as just one [enterprise] to many [suppliers],” said Mike Mucucci, vice-president of solution strategies at Pleasanton, Calif.-based CommerceOne, noting that enterprises have several locations and multiple systems to integrate. “A lot of internal divisions inside the company want to use private exchanges to help the internal process.”

Getting suppliers and distributors on-line, or getting marketplace liquidity, continues to be a problem for companies that want to gain some efficiencies through e-procurement and electronic catalogues.

“A big problem right now is supplier adoption, getting their content on-line and being able to react to a supplier request,” said Michael Schmitt, chief marketing officer at Ariba. “Just because you build a supplier marketplace doesn’t mean they will come. You have to make it easy.”

The push to get partners on-line easily and to link internal and external business processes is making integration technology a top priority for further product development, the panelists said. But the vendors disagreed on whether a best-of-breed or integrated platform approach was most suitable.

While the CommerceOne and Ariba executives said that integration between applications allowed for a best-of-breed proper approach, SAP’s Kemna argued that a platform with links to third-party applications is better in the long run.

“You need a deploying architecture to support new applications like CRM and supply chain,” he said. “What you call touch points [between applications] in reality are highly costly, sensitive interfaces from the business point of view that you have to maintain.”

i2’s Mackay argued that a platform that can integrate third-party products is powerful but noted that b-to-b communications standards are very immature.

“Standards are a bit of a joke. There are 500 standards [for b-to-b connectivity], which means that there aren’t standards. Eighty per cent of companies are doing EDI, so if there is a standard, that’s it,” Mackay said. “The problem with EDI is extending it. One thing that standards promise is to take a point-to-point transaction and add services to that, but it’s not really there yet.”

Addressing the economic slowdown, the panelists recommended that businesses focus on applications that have a clear ROI and cut costs.

“With the challenging economic times, the two areas companies should focus on [are] core competencies and ‘a-prime’ applications,” said Ariba’s Schmitt. “You should pick one, two or three applications where you can get value back and those will be in boosting sales [and] managing [capital] assets and electronic procurement to cut costs.”